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To: Valueman who wrote (11531)	6/16/1998 12:10:00 PM
From: rhet0ric	Read Replies (1) \| Respond to of 152472

Re: Comparison with S&L Fiasco I agree. The S&L analogy makes much more sense than the 1929 depression. There seems to be a common misunderstanding about the 1929 market crash. People think that the U.S. economy was humming along nicely in the "Roaring Twenties" when suddenly and irrationally the stock market crashed, which sent the world into the Great Depression. In fact, the world economy, including the U.S. (albeit not to the same extent as Europe), was in extremely bad shape in the 1920s, and it was that underlying weakness that led to the crash. One section of my (unfinished) doctoral dissertation was devoted to this topic, and involved first-hand research of 1920s economic history. In contrast, today, two out of the three poles of the world economy, i.e. Europe and North America, are fundamentally very strong. The next series of events is predictable: as a result of Asian currency devaluation, lower cost of labor, higher unemployment, and opening of legal barriers (in many countries foreigners couldn't even own businesses there until recently), U.S. and European capital is going to flood into Asia in the form of acquisitions, factory start-ups, and IMF funding; next, Asia is going to climb out of its recession as a result of this investment, and by massively increased exports back to the U.S. and Europe. Capital loves to expand. Asia represents a huge expansion opportunity. It's just a matter of time. As soon as capital believes that the devaluation has near bottomed out, the rebound will kick in with a vengeance. rhet0ric